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PG&E offers plan to replace Oakland plant with upgrades, clean energy

Pacific Gas and Electric Co. said it has a way to eventually replace a jet fuel-fired power plant in Oakland owned by Dynegy Inc. with cleaner resources. The utility said Dec. 6 that its Oakland Clean Energy Initiative would provide a viable, low-carbon alternative to the 165-MW Oakland power plant, which the state's grid operator has said is needed for reliability. The California ISO has a reliability must-run contract with Dynegy affiliate Dynegy Oakland LLC for the three units that runs through 2018.

In operation since 1978, the plant seldom produces power. According to S&P Global Market Intelligence data, the plant had a 0.39% capacity factor in 2016. Rather than looking to a new fossil fuel plant or new transmission lines through Oakland's city streets, PG&E said that in the future, it wants to use local clean energy resources including energy storage, energy efficiency and electric system upgrades to ensure reliability.

The company planned an event Dec. 6 to promote support for the proposal, which if approved, would go into service by mid-2022.

"Today's event marks an exciting milestone in our work together to meet the energy needs of this terrific city — and really, to set a model for other cities in California and beyond," Geisha Williams, CEO and president of PG&E's parent company, PG&E Corp., said in a news release.

PG&E said it submitted the proposal to CAISO through its annual transmission planning process. CAISO is scheduled to decide on the initiative in the first quarter of 2018. If the project is approved, PG&E said it will open up a request-for-offers process. PG&E will work with East Bay Community Energy to invite distributed energy resource providers to propose "innovative and competitive solutions" as part of the portfolio. Depending on the exact resource mix, the solicitation is expected to result in 20 MW to 45 MW of clean energy resources, the utility said.

PG&E would also file for cost recovery with FERC and the California Public Utilities Commission. PG&E said it expects to make that filing by the end of 2018. A Dynegy representative said the company is aware of the proposal but had no comment. PG&E said it invited many stakeholders to weigh in on the proposal, including the city of Oakland, environmental groups such as the Environmental Defense Fund, the West Oakland Environmental Indicators Project and the Natural Resources Defense Council, as well as local businesses near the plant. The plan also has the support of labor groups, PG&E said.

Oakland Mayor Libby Schaaf said in the news release that the proposal would achieve a number of goals for the city, including cleaner air, improved health and quality of life for residents and enhanced support for clean jobs.